 
The Gift of Grandparenting: Building Meaningful Realtionships
with Your Grandchildren
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A COLLEGE EDUCATION: GIFT FOR YOUR
GRANDCHILD
The gift of education--what better
present can you give your grandchildren? In June, President Bush signed into
law a new tax bill that includes a break for families who want to save for
children's college. Under the federal tax bill, Section 529 programs across the
country become tax free beginning January 2002 when used for qualified higher
education expenses. Section 529 refers to the section of the IRS code which
addresses the plans and their tax treatment.
The new bill means that you can invest in
your state's education program and when your grandchild goes to college, he or
she will not have to pay any taxes on the earnings in the account. Until the
recent change, earnings on a 529 plan account were taxable as income at the
student's rate when the money was used to pay for college. You can find out
about your state's education program by
clicking here.
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